U S A I( A&
E 0 E -PROOF ONLY
TRANSCRIPT OF BRIEFING BY THE PRIME MINISTER 14 MAY 1986
ON VIP FLIGHT TO TOKYO
PM: Well, essentially the visit to Japan is to consolidate the
good relations at the leadership level that has already been
created since 1983. I'll be taking the opportunity to re-emphasise
our concern about the crisis in the international trade area as
far as agriculture is concerned and in that context to tap into
thoughts of another one of the seven major industrial countries.
And in that sense we see this visit as a quite logical extension
of the visit we have just made to America and Europe. Obviously
the centrepiece of the visit to Japan will be the discussions
tomorrow morning with Prime Minister Nakasone and I will also
be meeting with four leading Cabinet ministers and that is
Foreign Minister Abe, Finance minister Takeshita, Miti Minis Uer
Watanabe and Agriculture Minister Hata.
Now quite clearly the prime focus of these discussions will be
economic and in the terms that I have mentioned. But I will also
be taking the opportunity to discuss a wide ranging number of
issues in the international political and security fields. Without
being exhaustive about that we will be talking about the, and
certainly I will be wanting to hear from Prime Minister Nakasone,
about the strategic situation in North Asia. And one particular
area that I would be wanting to talk with him in the light of the
latter part of get an assessment from Prime Ministe-r
Nakasone of developments in the Philippines. I will be informing
him of our desire to increase assistance there and I will take this
opportunity of trying to commence by specific discussions as to
how, with others, we may be able to ensure that aid which goes to
the Philippines is most effectively co-ordinated.
Now clearly as I was saying the initial focus of the economic
discussions will be on the recent Tokyo Summit conclusions.
I would be interested to hear from Prime Minister Nakasone his
assessment of the Summit for international exchange,
rates and for the whole MTN range of issues. And in that latter
respect I have particular interest on Australia's behalf as-* to
the question of the timing of the new round and to the prospectswithin
that round for agricultural and trade issues to be given
a prominent place. And we will be making it clear to Prime Minister
Nakasone that we believe that the September GATT ministerial
meeting should ideally represent the launch of the round.
As far as bilateral issues are concerned I believe they are in
fairly good shape. The trading relationship we don't expect
those to dominate discussions. Rather I hope we will be able to
spend a considerable amount on the opportunities now emerging
for developing the economic relationship which in the past has
been dominated by trade and agricultal and mineral products.
I think that the opportunities for those new directions are
indicated by the substance of the Maekawa Report that was commissioned
as you know by Prime Minister Nakasone. And they suggest that there
is considerable scope for broadening the economic relationship
between our countries. There is an increasing complementarity I
believe between the two economies and with the recent depreciation,
2.
substantial depreciation of the Yen against the Australian dollar
and with the improved market access opportunity that exists, the
opportunities for increased industrial co-operation I think a new
range therefore of the basis for our economic relationship are
emerging. And I think the sorts of things that we have been doing
Australia particularly in the deregulation of the financial area
to give an added basis for . some optimism in that respect.
In saying those things I don't want to appear by implication to
be downgrading trade and agricultural and mining products.
Well that in general terms covers what I hope to be dealing with
in this period in Japan.
JOURNALIST: Are you more optimistic or pessimistic after the
Tokyo Summit about the prospects for the September meeting?
PM: Well I think on balance you have got reason to be somewhat
more optimistic because for the first time in the Summit they
did address themselves and for some considerable period of time
to the question of agriculture. There was a recognition of the
need for the new round to get underway. I would think on balance
we are entitled to expect what is in the Summit will be using
their endeavours to try and get an early start to the MTN round.
And I will certainly be repeating to Prime Minister Nakasone what
I said in America and Europe about the accordance of agriculture
in the development of those at that round.
JOURNALIST: What is your concern about the aid being effectively
co-ordinated
PM: It is just that we said right at the beginning that it makes
sense, obviously by definition, if ourselves, the Americans, the
Japanese are going to be involved in trying to assist the new
regime to tackle the basic social and economic problems that
exist there, that it makes sense if it is possible to try and
co-ordinate as far as possible the sort of things that we do.
Now I am not implying by that that we are going to be able to
establish some actual mechanism, some framework to achieve those
results but I think it is the sort of thing that sensibly is
capable of discussion at the level of leadership and then perhaps
subsequently at the level of officials.
JOURNALIST: Are you prepared to give a comment on the balance of
payments figures released yesterday?
PM: You will be.-seeing that I will be saying in my speech in Japan
that they are disturbing figures. But I believe that we can adapt
our policy framework to ensure that the benefits of the depreciation,
substantial depreciation that has occurred will flow into the
economy. I will be addressing that at some in the speech.
JOURNALIST: Will you say how you will adapt it in the speech?
PM: No, I won't be going into detail.-'
JOURNALIST: Is this suggesting some major change?
PM.: No, No, it is not suggesting some major change.
JOURNALIST: What do you mean by adapting policy?
PM: Well, clearly we have got a situation where the level of growth
that has occurred has been sucking in a very high level of imports,~
and the sort of policies that we are pursuing will be directed to
ensure that we don't continue to have an unsustainable level of
imports. Now that will mean, and I am not saying anything new here,
we have indicated that the rate of growth that we have had in the
first three years will have to be somewhat subdued in this next
financial year for that reason.
JOURNALIST: So you don't think these figures were one-off?
PM: I think that we have seen the worst of the figures.
JOURNALIST: Are you talking about fiscal or monetary policy
particularly or signalling any
PM: Oh look, let's retract it. The trouble with you is I suppose.
you should be more careful'in your use of words. I am not trying
to imply anything more than I spelt out to you now. It reinforced
to me to ensure that the level of activity is not at an unsustainable
high level. I mean you can't go on having an imbalance in your
imports and exports at that sort of level.
JOURNALIST: Do you want some spending cuts?
PM: That would always be nice. We won't be having a comprehensive
May Statement of the type you have seen in the past. It maybe
possible in respect of some * measures to get a full year benefit.
But there won't be a similar sort of May Statement.
JOURNALIST: What are the implications for wages policy from the
lastest figures? Do you think you are going to require any fine
tuning or re-adjustment
PM: I think we will wait and see the outcome of the decision 6f the
Arbitration Commission. But we will look at the whole range of
policies as we go through but I don't see any need at this point
to re-assess the policy which has been successful in the past in
producing very, very considerable wage restraint. There is no
comparable period in Australia's history when you have had economic
growth averaging as it has at 5% plus over the last three. years
where you have had associated with that such a low level of wages
growth. So you have got to observe the success of the policies that
have been in place. It would be silly to jettison policies which
have produced a level of wage restraint far beyond anything.
Australia has experienced in the past in comparable periods of
growth.